SACRAMENTO - A day after the Mercury News raised questions about a
possible conflict of interest, Assemblywoman Sally Lieber said Thursday
that she will drop her authorship of a controversial bill that would
require girls to be immunized against the virus that causes cervical cancer.
The bill remains alive, but under another legislator's name.
Lieber's decision to pull her name from the bill involves complicated
family ownership of some stock. She said she didn't think a conflict
existed, but acted out of an abundance of caution.
According to financial disclosure statements, Lieber's husband's family
trust -- which she said she has no control over -- holds thousands of
dollars of stock in Merck, currently the only pharmaceutical company that
makes a vaccine against the human papilloma virus, or HPV.
Lieber introduced legislation in early December that would require girls
to receive an HPV vaccination before they enter the sixth grade, an idea
that's contentious because HPV can be spread only through sexual contact.
Although Lieber has listed the Merck stock on her financial disclosure
forms since she arrived in the Assembly four years ago, the Mountain View
Democrat said she didn't draw the connection to her cervical cancer bill
until a few weeks ago. At that point she said she consulted with attorneys
for the Legislature.
As of Wednesday, Lieber said she hadn't received a definitive answer, but
she said the legal office indicated that her family's stock holdings would
not disqualify her. Thursday, though, when the Mercury News questioned her
a second time, Lieber said she decided to drop her involvement.
``I don't know if it's a conflict, but I think it gives the appearance of
a conflict, which I think is problematic because it deteriorates the faith
people have in government,'' Lieber told the Mercury News. ``I should have
done more homework before introducing it. That was bad; it was wrong.''
Lieber, speaker pro tem of the Assembly, has become a lightning rod over
the past month, drawing heat over the HPV bill and her idea to ban spanking
of children up to their fourth birthday.
First-year Assemblyman Ed Hernandez, D-Baldwin Park, will carry the
vaccine legislation in her absence, Lieber said.
One government watchdog and expert in government law said Lieber did the
right thing.
``I give her a lot of credit for saying, `Despite the fact that this is a
good bill, I'm dropping it,' '' said Bob Stern, president of the Center for
Governmental Studies in Los Angeles.
Stern said he would need to know more about the case to say conclusively
whether Lieber had a legal conflict of interest, but it appeared that she
did because her bill could have a significant impact on Merck's revenues.
Even so, Stern added, the potential financial gain for Lieber if her bill
passed would probably be relatively small.
Lieber said in an interview that she and her husband have no control over
the family's three trusts, which were created in 1935. Under the terms of
the trusts, she said, those decisions are made by Fiduciary Trust in
Boston. Lieber said she receives an annual report detailing the trusts'
holdings so she can fill out her state-mandated financial disclosure forms.
According to Lieber, her and her husband's share of the trusts include
about $14,000 in Merck stock; the trusts' total investment in the drug
company would be several times that because the trusts are divided among
several beneficiaries.
It is generally impossible to discern a lawmakers' precise assets because
state financial disclosure law only requires them to indicate their
holdings in broad ranges. In the most recent filing, Lieber indicated two
separate trust holdings in Merck: one between $2,000 and $10,000; another
between $10,001 and $100,000.
In a statement covering 2004, Lieber attached specific amounts to the
trusts' stock holdings even though she wasn't required to. At that time,
her Merck holdings exceeded $27,000, and overall the trusts held more than
$112,000 of the company's stock. Merck's stock price has fluctuated since
then, and financial managers may have sold some of the trusts' assets in
the Fortune 500 company.
According to her 2005 financial disclosure, the most recent available,
some of the trusts' other stock holdings include BP, Exxon Mobil,
Hewlett-Packard, IBM, UnitedHealth Group and Pfizer, another drug company.
Lieber said she and her husband, David Phillips, will not receive any
income from the trusts until his father dies.
The day before the Food and Drug Administration approved use of the HPV
vaccine Gardasil in June, Merck stock closed at $33.96 a share. Since then,
it has risen 33 percent to close at $45.13 on Thursday.
According to state campaign-finance records through Dec. 31, Merck has
never contributed to Lieber's political campaigns.
Lieber, a former Mountain View councilwoman who joined the Assembly in
2003, said she has avoided direct contact with Merck before and since she
introduced her vaccination bill. She said the company requested a meeting
with her, but she declined.
``This is about cervical cancer,'' said Lieber, a longtime advocate for
women's issues, ``not about vendors.''
Lieber has, however, been in contact with a group called Women in
Government, which has been lobbying other states to adopt legislation
similar to Lieber's. The Associated Press reported this week that the group
has received funding from Merck for those efforts.
Lieber said she was unaware that Merck was bankrolling Women in
Government's HPV efforts.
Lieber's husband's trusts have been an issue in her public life at least
once before. In 2001, when Lieber was on the Mountain View council, she
abstained from a council debate over plans for a new Home Depot because of
the trust's stock holdings in that company. Lieber opposed the proposal,
which eventually was withdrawn.